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Asian equities: Play the long game

Anthony Fensom  |  13 Apr 2016Text size  Decrease  Increase  |  
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Sartori says China is a "stock-picking market" with opportunities from a bottom-up investment perspective.

"Foreigners have not given China the benefit of the doubt at all, so Chinese-listed shares in Hong Kong are very cheap. There are parts of the market we would avoid no matter how cheap they become, but there are other parts we think should have good prospects for the next three to five years plus," he says, nominating healthcare stocks as a particular favourite.

Elsewhere in the region, Sartori pointed to India as a long-term favoured market in line with its continued economic growth, nominating Indian financials, healthcare and infrastructure-related and select consumer stocks.

Nikko AM has moved "overweight" in Indonesia and Thailand, although it is "underweight" Hong Kong and Singapore, while Sartori says falling oil prices and politics make Malaysia a market to avoid.

Looking ahead, Sartori predicts that Asian equities could enjoy gains by year-end despite the current gloom.

"The starting point is pretty depressed with a lot of bad news priced in. I think there could be a few surprises in terms of the benefits finally flowing through from lower oil and commodity prices, and if China can get back on the front foot in implementing reforms, then that could be a real positive surprise," he says.

On 4 April, Nikko AM's global investment committee expressed its positive view on Japanese equities, saying a weaker yen and strong profits would benefit Japanese corporates, while it also maintained an "overweight stance" on other Asian equities, predicting gains in both Hong Kong and Australian stocks as confidence increases in the Chinese economic outlook.

For Australian investors, buying companies benefiting from Asia's rise or investing in Asia-oriented exchange-traded funds highly rated by Morningstar could prove worthwhile, should Asia indeed prove "stronger for longer".

 

© 2016 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written content of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

© 2019 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

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